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Two-Stage ABC for Manufacturing Columbus Foundry, a large manufacturer of heavy equipment components, has determined the...

Two-Stage ABC for Manufacturing
Columbus Foundry, a large manufacturer of heavy equipment components, has determined the following activity cost pools and cost driver levels for the year:

Activity cost pool Activity cost Activity cost driver
Machine setup $600,000 12,000 setup hours
Material handling 60,000 2,000 tons of materials
Machine operation 500,000 10,000 machine hours

The following data are for the production of single batches of two products, C23 Cams and U2 Shafts:

C23 Cams U2 Shafts
Units produced 500 100
Machine hours 3 5
Direct labor hours 400 400
Direct labor cost $5,000 $10,000
Direct materials cost $30,000 $20,000
Tons of materials 12.5 8
Setup hours 4 9

Determine the unit costs of C23 Cams and U2 Shafts using ABC.
C23 Cams $Answer


U2 Shafts $Answer

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